Avalanche is being shuttered and 300 jobs are now lost as a result

Disney is effectively no longer a game publisher, and the company announced during its second quarter earnings that its toys-to-life franchise, Disney Infinity, would be discontinued. Disney's chairman of consumer products and interactive media, Jimmy Pitaro, indicated that the company would incur a $147 million charge as a result of the shutdown of Disney Infinity studio Avalanche; 300 employees are now out of work.

"This was a difficult decision that we did not take lightly given the quality of Disney Infinity and its many passionate fans," he said.

Disney said that it's now looking at the video games business exclusively as a licensing opportunity, so games based on properties it owns, like Star Wars, are of course still receiving games (such as those from EA), but Disney itself no longer has any interest in publishing them. The company also cited a "lack of growth" in the toys-to-life market. While the sector grew seven percent in the US in 2015, analysts have noted that the market could shrink in 2016, and clearly Disney Infinity was already feeling the pinch.

As for current Disney Infinity owners, Disney said it will still release the character playsets for the films Alice Through the Looking Glass and Finding Dory. Playsets for the upcoming Star Wars: Rogue One had been in the works, but those will never make it to retail now. It'll be interesting to see what moves Activision makes with Skylanders and how Nintendo's Amiibo line holds up in a shrinking toys-to-life market.

Geez... this was unexpected, but not so unexpected. The TTL market is flooded to the point people have been dumping stuff on auction sites and it just sits there untouched. of course, this news will set the hounds loose to grab up the final sets and hoard them to rake in a profit down the road. But a lot of folks don't have the money to buy this stuff, so paying even more of a premium will be the stuff a collector's dream is made of.

Anyway, high hopes that those 300 jobless aren't having to live a Spartan existence. Get back into the field and into the fight soon!

Wishing all of the Avalanche employees the best and hope their talent is seen and picked up by another publisher with category management skills.

This didn't need to happen. The fact is, the category will now shrink because there will be less products in the market. That, however is not reflective of the level of interest in connected toys.

There is a lack of innovation among the second generation connected toys. For the first generation, please see Zowie Toys back in 1997. Most of the current offerings are the same with different licenses.

Skylanders will also not have a new product this year due to weak demand as they put it.

My opinion is this is mostly category mismanagement. The toys are overproduced with too many varieties available at the same time. Lines need to be limited by units and time so that they create an aspirational experience and scarcity. Disney created "The Disney Vault" - a way to bring out their films during the VHS era and sell them for a limited time and then retire them for years. They have the formula and they aren't using it.

Instead, we get every possible idea in a product line launched at once and then small incremental changes over the annual cycle. With so much production, no sense of limits or rarity, and the ability to buy pretty much every toy on sale anytime if you just look, they have failed to build and maintain their IP.

There is virtually no collectibility, so again, very limited reasons to buy more of the same.

Anyway, there is a market for smart toys, and it is growing, but you need innovation, category management and a strategy to sell through any inventory.

All that aside, I again want to express my hopes that the team members find new opportunities quickly. They have skills that should be in demand by Hasbro, Mattel and other companies that have the points stated above, more dialed in.

First off, I wish all those that are affected by this news a successful resolution of their position.

But from an observational aspect, this is yet another example of the inability of Disney to understand what they have, and to apply the correct leverage to maximize it. Too many inexperienced chiefs and not enough experienced Indians?

This is now the latest 'removal' from interactive digital entertainment by the conglomerate, and each time they stumble no one seems to learn from the situation - more often the gate-keepers take a incredibly large 'Golden Parachute' paid for by us investors, and leaves the office with no retention of knowledge. Creating the perfect storm for the next executive to walk in and make the "same mistakes as his predecessor"!

We know there is now a group within Disney looking to try and jump into VR - lets hope that they have at least been briefed on what went wrong the last time, so they do not end up under the 'Avalanche!'

Instead, we get every possible idea in a product line launched at once and then small incremental changes over the annual cycle. With so much production, no sense of limits or rarity, and the ability to buy pretty much every toy on sale anytime if you just look, they have failed to build and maintain their IP.

There is virtually no collectibility, so again, very limited reasons to buy more of the same.

The big issue here is/was, we're in the era of "everyone MUST be served" and I'm betting Disney was aiming to please and that backfired a wee bit too much. They handled this not in the same way they handle their films where they dip a toe into the vaults and drop classics out for a limited time, then shut the doors for a while. TTL fans did have some issues at the beginning with collecting some figures (if my friend with an almost complete set noted earlier today), but I'd say that became less of an issue between the resale market and DIsney keeping up with demand.

I'm gathering Disney decided to up their TTL output so no one or as few no ones as possible were running across the country trying to find a super-rare Cosmo Kramer Mickey or whatever. The problem seemed to be too many of those and assorted other extensions hitting the market faster than parents could buy them as not every Disney fan wants EVERY Disney toy.

THAT said, I'm surprised they didn't at least let the now killed off Rogue One line be the last stand. As a final product, I bet it would have been a complete sellout all over the place if enough lead time was given for fans to reserve a set or two each (as a defined limit to "prevent" hoarders from cashing in)... Ah, well...

This sucks as Disney Infinity was one of the products my company did merch work for. But more important than that is of course those 300 employees finding new employment. Hopefully another company offers them an invite.

As for Disney, since they are only interested in licensing their properties to others to make video games I wonder if they'd license out their Split Second video game property. I loved the first game and heard that a sequel was in the works before they shut down Black Rock studios. Someone needs to continue that series because it really was a great alternative racing experience.

TTL seemed weird - it's like they want the collectors out there, chasing limited editions, but at the same time, didn't want the bad PR that that might have drawn. Reminded me of comics in the '90s - issue 1s and collectable covers everywhere, but because of the high-print runs and second-hand market, nothing was ever valuable.

Disney said that it's now looking at the video games business exclusively as a licensing opportunity [...] but Disney itself no longer has any interest in publishing them.

Does anyone have any idea how this is affecting LucasArts publishing and games Disney has a piece of? I skipped buying the X-Wing and TIE Fighter games over the May-the-4th Steam sale, but if past experience is anything to go by, they're going to get pulled now, with this news. (The publishers for quite a few games on Steam are listed as: LucasArts, Lucasfim, Disney Interactive).

Edited 1 times. Last edit by Morville O'Driscoll on 11th May 2016 7:26am

This is a replay of Disney Blackrock: Build a big studio to make new IPs, get them out to market, realise they aren't making pure profit, shut down the studio. Studio Gobo was a Blackrock remnant that ended up getting Disney as their main client. The story doesn't report this but I bet they're in trouble too - they were also working on Disney Infinity. *Sigh

three hundred people let go compared to the thousands of long time employees fired to get infinity out the door, is really just the final death sigh of a company that had an idea and tried to hire people with big ideals and no loyalty to the company. Avalache was working on inifinity for years before they hired a who ever let Alex Alverza(forget how to spell his last name) walk through their studio, who then applied to zoic studios to take and idea and get zoic to make it happen, all in 2009... the guy was great concept artist but having seen both concept arts pieces before the launch of both games... it is clear that both companies hired people with no concept of what it means to work for a company. I have no idea who got the credit eventually since sleazy people tend to rip off people who steal from other people, figuring they will never speak up... but Disney media group had going away parties every week for a group of people laid off to hire more people to work on infinity and to cover the budget over runs... they fired their entire brain trust and experienced people because my guess is that they were trying to get rid of who ever leaked the concept art from avalanche... all while trying to get the design they spent so much time on shipped as a product since they sunk so much money into it.
Fun thing, those toys have shares written onto the chip of certain toys. They wanted to have a back up copy of the shareholders so linked the shares to their video game accounts and told the share holders to make sure it was played first on their video game accounts... so some parents may have linked their shares to their kids accounts... I wonder how many people are going to toss the toys with thinking about that.

I vaguely remember Disney being a big fan of a so called royalty system, wherein the gross income from a movie is first diluted among many Disney subsidiaries collecting 'royalties', before the actors get their percentages. Nicolas Cage famously was supposed to get 10% of 197 Million, but by the end of Disney's accounting magic, he ended up with $3 million.

Between retailers getting a cut for stocking all the plastic and developers having typical contracts, Disney might not have earned enough Cents on the Dollar (or rather Dollars on the Cent) to consider games worthwhile. They make a billion Dollars per Marvel/Star Wars movie in ticket sales alone and there is no shortage of those. If someone can offer them a $4 billion per year video game, I am sure they bite as a publisher again. Just like Activision a few years back, they probably set themselves a threshold. Tim Schafer was the sacrificial lamb then, Disney Infinity bites the dust now.